Digital news media policy leaves several questions unanswered

Last month, the government issued clarifications regarding its earlier press note on 26% foreign direct investment (FDI) in digital news sites, a move that has left several questions unanswered.

On the positive side, recognizing the burgeoning influence of the digital news medium and accepting it as a separate entity is welcome. The ministry of information and broadcasting (MIB) also promised to extend news sites some benefits, such as Press Information Bureau accreditation for their reporters, cameramen and videographers and giving them access to official press meets. Similar benefits are now available to print and TV journalists. It also said digital news platforms will be eligible for ads through the Bureau of Outreach and Communication.

But in a single swoop, it also clamped down on foreign investments and foreign nationals employed by digital news sites. A majority of directors on the board and the CEO need to be Indian citizens and any foreign personnel deployed for more than 60 days need a security clearance. The Union Cabinet had approved 26% FDI in digital media in line with print media guidelines, even though it allows 49% foreign equity in news channels.

To be sure, experts in internet law feel that although there may be a need to introduce regulatory frameworks that can govern digital news media in a manner that ensures accountability, best practices for fact-checking and reporting, “the introduction of an FDI cap of 26% in a growing segment of the industry will only lead to over-regulation without actually addressing the aspects that may require some regulation”, said Amber Sinha, executive director at the Bengaluru-based think tank Centre for Internet and Society.

“Further, this comes under the government route as opposed to the automatic route requiring prior government approval,” Sinha said. Several digital news media companies have built business models reliant on funding for their survival until they break even. This step reduces the pool of investment available to them, he added.

The 26% FDI cap is applicable on entities registered or located in India, streaming or uploading news or current affairs on websites, apps or other platforms. These could also be news agencies that gather, write and distribute or transmit news directly or indirectly to digital media entities and news aggregators. The news aggregator can be an entity that uses software or web applications to aggregate news content from sources such as news websites, blogs, podcasts, video blogs, and so on.

Sinha said there is no clear definition of what constitutes ‘digital news media’. “It is unclear if this excludes social networking and content websites which also host news content. While it does not appear to be the intent of this regulation to include such websites, the use of the phrase ‘user-submitted links’ confuses matters.”

Even the clause on news agencies gathering and distributing news to digital media entities is ambiguous. “It is not clear if this only includes news agencies which distribute content exclusively to digital news media entity and digital news aggregators,” Sinha added.

However, others refer to Indian entities ‘registered’ or ‘located’ in India. Experts are confused if this excludes global news sites that operate from outside India but may have sales or other teams in place in the country.

A media sector executive whose company owns a video streaming platform that streams TV news channels, as well as documentaries that may fall under current affairs, wondered if some of its content may be re-evaluated. “In my understanding, news channels are already licensed by the MIB and have home ministry clearance, so they should not be a problem,” he said.

For now, foreign media companies, which may have set up 100%-owned digital news sites here, will scramble to rejig their business models and shareholdings within a year to comply with the guidelines.

However, Sinha said instead of focusing on regulating the industry through an FDI cap, which may make existing business models harder to sustain, “the focus must be on qualitative regulatory efforts which introduce accountability and enhance the range and quality of news that people have access to”.

There cannot be a singular policy framework for the digital ecosystem, as it pertains to many wide-ranging issues of intermediary liability, content regulation and e-commerce practices. “However, any regulatory effort must evaluate its overall impact, and then decide if it’s desirable,” he added.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.